This calculator uses the standard SIP Future Value formula based on compounding:

For Step-Up SIP, the formula extends to account for annually increasing contributions, which is calculated year-by-year using the geometric series of growing annuities. This is why rupee cost averaging combined with annual step-ups can dramatically accelerate long-term wealth compounding.

Yes — 12% is a conservative long-term estimate for diversified equity mutual funds in India. The Nifty 50 has historically delivered approximately 13–14% CAGR over 20-year rolling periods. Flexi-cap and mid-cap funds have delivered 14–16% over similar periods.

However, equity markets are volatile. In any given 3–5 year window, returns can be negative. SIP smooths this through rupee cost averaging — buying more units when prices are low. For long-term wealth creation (10+ years), 11–13% is a reasonable planning assumption for 2026 Indian equities.

Rupee cost averaging is the natural outcome of investing a fixed amount regularly. When mutual fund NAV (price) falls, your ₹10,000 buys more units. When NAV rises, it buys fewer units. Over time, your average cost per unit is lower than the average NAV — which is the mathematical edge of SIP over lump sum investing in volatile markets.

This is why long-term wealth compounding via SIP is less dependent on market timing. You don't need to predict market highs and lows — the process handles it systematically.

Under 2026 rules, Long-Term Capital Gains (LTCG) on equity mutual funds exceeding ₹1.25 lakh per financial year are taxed at 12.5% (without indexation). This calculator estimates your approximate LTCG liability by applying 12.5% to gains above the ₹1.25L exemption threshold.

Note: Each SIP installment has its own holding period — the first installment qualifies as long-term after 1 year, while your most recent installment may still be short-term. This is a simplified estimate. Consult a SEBI-registered advisor for precise tax planning.